EURUSD has formed higher lows and hit resistance around the 1.0500 mark, creating an ascending triangle pattern on its 4-hour time frame. Price is closing in on the triangle top and might attempt a break higher.

If that happens, EURUSD could climb by the same height as the chart formation or around 300 pips. The 100 SMA is above the 200 SMA to confirm that the path of least resistance is to the upside or that the ceiling is more likely to break than to hold, and the pair is above both moving averages so these could hold as dynamic support.

Stochastic is on the move up to show that bullish momentum is present, but the oscillator is already testing the overbought zone to signal exhaustion. Turning lower would show that bears are ready to take over, possibly taking EURUSD down to the triangle bottom near the 1.0400 major psychological mark.

RSI has room to climb before reaching the overbought zone to signal exhaustion among buyers, so the rally could keep going until that happens.

EURUSD is likely to take cues from upcoming flash PMI releases from its major economies, as strong improvements in Germany’s and France’s manufacturing and services sectors could mean more upside for the shared currency on dampened ECB easing expectations. Weak results, on the other hand, could lead the euro to retreat.

The dollar has been on weaker footing on account of the slump in Treasury yields spurred by Bessent’s remarks and cautious Fed commentary, warning about risks from tariffs and inflation trends. Mid-tier data like the initial jobless claims and Philly Fed index also fell short.

The US flash PMI reports are also up for release later in the day, so strong figures could prop the currency higher while weak data could revive dovish Fed expectations.